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Lonzo Ball, Nike take very different approaches in launching new shoes

NBA draft prospect Lonzo Ball unveiled his first signature shoe, the Big Baller Brand ZO2, earlier this month. The retail price, $495 (all figures in U.S. dollars), was as audacious as Ball rejecting major brands to create his own shoe.

A day later, Olympic gold medallist Eliud Kipchoge ran the fastest marathon ever recorded. He covered 42.2 kilometres in two hours 25 seconds, thanks to a phalanx of runners decreasing wind resistance, a pace-setting car that also lessened drag, and special shoes Nike claimed made him four per cent more efficient.

The Nike Zoom Vaporfly Elite was featured heavily in the publicity campaign preceding the historic run, with its on-sale date (June 8) and price ($250) made plain.

In that 36-hour span, Ball and Nike took distinct approaches to launching pricey products.

Ball, a projected top-three pick in next month’s draft, is betting his potential will seduce consumers into buying shoes more expensive than any Air Jordans. Nike, meanwhile, showcased its new shoes in action during an event that was part science experiment, part road race, part infomercial.

So who will sell more shoes: Lonzo Ball for BBB or Eliud Kipchoge for Nike?

While both launches generated online buzz and media coverage, experts say Nike’s attempt at breaking the two-hour barrier in the marathon is more likely to lead to sustainable sales.

“People like to know they have (useful) technology, and that there’s a purpose for the shoe, and that adds value,” says Matt Powell, a sports industry analyst at the retail analytics firm NPD. “A shoe that an athlete can perform at a high level in has much more value than one that’s around a high-priced, celebrity-driven mentality.”

Both Nike and BBB entered last week eager to stand out in a competitive athletic shoe market. According to NPD, Americans spent $4.6 billion on basketball shoes last year, while the running shoe market totaled $5.8 billion. Nike controlled 78 per cent of the overall U.S. athletic shoe market for the year ending March 2017.

While an incoming rookie like Ball would likely command a seven-figure shoe deal, his father, BBB founder Lavar Ball, made headlines for insisting Ball deserved a $1-billion contract. When big brands didn’t meet his demand, the elder Ball sought to make shoes on his own.

“Because he ain’t Lonzo Ball, that’s why,” he told Fox Sports 1’s Undisputed. “Did (Jordan) have his own brand coming in? It’s a new era called the Ball era.”

The strategy attracted some high-profile customers. Former NFL receiver Chad Johnson bought the shoes, and rapper The Game posted a receipt for two pairs to his Instagram account, explaining his desire to help a family brand. By week’s end, Lavar Ball claimed to have received at least 495 orders, but it’s not clear when the shoes will be shipped to customers.

But experts highlight the flaws in building a brand first and hoping it attracts customers later.

Powell points out most major shoe brands would have paid Lonzo Ball seven figures for a three-season deal, then offered him more money if he grew into an elite star. Creating his own company guarantees Ball no cash, while making an unsteady bet he’ll develop a superstar-sized following.

San Jose-based sports marketing agent Quency Phillips says beyond the splashy product announcement, questions linger about how BBB will fulfill orders, and who exactly the target audience is. Serious basketball players have little incentive to switch brands at that price, while most wealthy people prefer established luxury labels.

“That ridiculous price point has always been just marketing,” Phillips says. “We don’t know anything we would normally know aside from the visual and the cost. Everything else we won’t know until somebody actually has it, and we don’t know when that will be. Nobody in my circle ordered it. There’s not a single part of this story that would make me personally buy this sneaker.”

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In contrast, Nike created demand by selling the idea the footwear could make you faster. Kipchoge’s performance, more than two minutes quicker than the official marathon world record, burnished the shoe’s reputation even as other runners in the experiment fell well short of the two-hour barrier.

At Blacktoe Running on Bathurst St., owner Mike Anderson receives several queries a week about Nike’s special marathon shoes. But he’s not sure elite runners, who have developed strong product preferences, will buy the shoe when it hits retail.

“I’d love to be selling that shoe in the store today. It would be easy to sell,” Anderson said. “Shoe geeks will buy it for sure. It will be less about (performance) and more about income bracket and personality type.”

According to runningusa.org, 17 million people ran road races in the U.S. last year. Hobbyists outnumber elites, and the ambitious among them represent a massive market for the new Nikes.

But experts say BBB’s best chance at success involves targeting a more sedentary market.

Where performance footwear represented 83 per cent of running shoe sales last year, according to NPD, performance basketball shoes composed just 41 per cent of basketball shoe buys. The remaining customers bought classic basketball shoes, making up part of the majority of buyers who purchase basketball shoes for fashion.

Powell says 75 per cent of athletic shoes sold are worn for fashion instead of performance.

To the extent that the ZO2 sells, Powell predicts buyers won’t be seeking high performance. He also doesn’t expect Ball’s marketing strategy to yield many sales.

“At best he can maybe sell 10,000 pairs of shoes,” Powell said. “You’ve got to have colour updates, style updates and a really clear distribution strategy. None of that seems to be at play here.”

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